I dissent from today's decision to initiate a Notice of Proposed Rulemaking into the type
of performance measures and accompanying reporting requirements that should be used in
evaluating an incumbent local exchange carrier's Operations Support System (OSS). I have
serious reservations about the propriety of initiating this proceeding at this time, and I believe that
the approach outlined here is far too regulatory.

I share my colleagues' concerns about competition and the possible effect of operation
support systems on competition. I have confidence that current statutes, and Sections 251 and
252 of the Act in particular, are sufficient to address these concerns. I fear that this NPRM
corrodes rather than reinforces the robust structure of the Act. This NPRM is written with the
best of intentions, but I fear the consequences are large, bad, and unintended.

Free Markets Do Not Rely on Regulation

In the best of worlds, consumers--by selecting higher quality services at lower prices from
among competing providers--decide which businesses may enter and survive in a market and
which may not. In this best of worlds, decisions between business and consumers and between
businesses and other businesses are based not on regulatory constructs but upon contracts.
Individuals are free to choose terms and conditions of contracts to suit their needs. One of the
many great advantages of contracts over regulation is that, with contracts, individuals can obtain
the specific terms and conditions to meet their specific needs rather than rely on the few generally
available offerings for terms and conditions under regulation.

For most of the past century, regulators rather than consumers, made choices both about
who may enter a market and about the terms and conditions of commerce. And regulators
practically always chose a single provider, no competition, and narrowly regulated terms and
conditions. Even where competition and private contracts were viable, regulators often insisted
on using regulation rather than contract to manage transactions in telecommunications markets.

Section 252 Can Address OSS Issues

The Telecommunications Act of 1996 changed the regulatory framework by removing
statutory and regulatory barriers to entry. Throughout the Act are concepts of competition,
deregulation, and a reliance on private contracts. Section 252, for example, establishes specific
forms of contracts, interconnection agreements, as the basis for various forms of commerce
between and among telecommunications carriers. These contracts were and are to be negotiated
between private parties, with State mediation and arbitration available. Contracts negotiated
under Section 252 are not entirely free from regulation, but neither are they so rigid in structure
that they cannot include provisions of interest to the contract parties such as OSS.

I have seen no evidence with respect to OSS that the process of negotiating private
contracts with State arbitration under Section 252 is not working. To the extent that OSS is of
interest to a party, it can negotiate those terms in an interconnection agreement. To the extent a
party cannot successfully negotiate terms and conditions for OSS privately, it can seek State
arbitration.

Has this process broken down? Perhaps there are instances, but in each case it is the
State, rather than the FCC, that would seem to have the logical jurisdiction to remedy those
disputes under Section 252. Even the most casual of conversations with any State Commissioner
reveals that OSS issues are closely monitored and addressed by the States. There seems little
clear evidence that the Section 252 process has failed either generally or specifically for the
purposes of OSS.

FCC jurisdiction is questionable

Even if, hypothetically, the Section 252 process has failed to address adequately OSS
issues, the jurisdiction of the FCC to remedy those grievances is questionable at best. The
majority proposes to institute this NPRM under Section 251. I have serious doubts regarding the
timing of this initiative. It has been more than two years since the Telecommunications Act of
1996 passed and -- as the majority recognize -- several states have already commenced
proceedings to develop performance measures. To the extent this guidance was requested, an
earlier proceeding would have been more helpful and in compliance with the statutory time-frames.

The Commission is initiating this proceeding under Sections 251(c)(3) and (c)(4) of the
Act. But the Commission's previous implementation of section 251 was successfully challenged in
court. In light of the Eighth Circuit's decision in Iowa Utilities v. FCC,(1) I have reservations about
the Commission's general authority to adopt any rules or regulations regarding performance
measures or standards for OSS, and to initiate this proceeding at this time.(2) Moreover, the Eighth
Circuit held that section 251(d)(1) "operates primarily as a time constraint, directing the
Commission to complete expeditiously its rulemaking regarding [ ] the areas in section 251."
Iowa Utilities v. FCC, 120 F.3d at 794. Section 251(d)(1) instructs the Commission that
"[w]ithin 6 months of the date of enactment" it "shall complete all action necessary to establish
regulations to implement the requirements of this section [251]". 47 USC section 251(d)(1). It
has been more than more than two years since the Telecommunications Act of 1996 passed. It is
questionable whether we have the authority to proceed with this Rulemaking under Section 251 at
this time.

Moreover, even if the Commission had acted within the Statutory time framework of
Section 251, it is questionable whether the specific details of this NPRM, national measures,
standards, terms, and conditions set by a federal commission, are necessary or consistent with the
combined language of Sections 251 and 252. Reading between the lines, I might easily argue that
the Commission has the authority to construct national rules for OSS; but other reasonable people
might reasonably observe that the phrase "operations support system" is not found in the Act,
much less any reference to Commission authority to impose national rules.

Finally, sections 251 and 252 frequently refer to one another. Section 252 establishes a
framework for private negotiations with State mediation and arbitration available. Presumably,
there is a direct means for States, through the arbitration process, to impose OSS measures, rules,
and standards as they see fit. Consequently, OSS may not be an issue in search of statutory
jurisdiction.

Even If the FCC Has Jurisdiction, this NPRM Is Excessively Regulatory

Even if the FCC had jurisdiction to make national rules for OSS, the approach taken in
this NPRM hardly seems deregulatory. There are a total of 30 measures proposed, page upon
regulatory page of measures. Is each one of these truly necessary? Do these endless pages of
measures add glory or insult to the deregulatory structure of the Telecommunications Act of
1996? Surely the proposed list is a broad-ranging shopping list of possible ideas rather than a
central core of measures.

Even if the list of measures were small and concise, their mere compilation begs the
question: for what purpose will they be used? There are but two possible answers: standard-setting regulation and litigation. It is not clear which of the two answers would harm competition
more, but it is clear that each will have corrosive effect.

Under the public interest standard, regulations should be economically efficient -- that is,
the ultimate benefits of any Commission regulation should exceed its costs. These costs include
the burdens associated with the requisite gathering and maintaining of accurate information, and
any accompanying reporting requirements. In almost all circumstances, truly efficient regulation
relies on relatively few and very simple measures. I am concerned by both the sheer number and
the level of detail contained in the proposed performance measures.

This NPRM is tedious with detail. Is it really necessary to measure more than nine aspects
of average response time for the pre-ordering phase alone? Do we really need to know the
average reject notice interval, the average FOC notice interval, the average jeopardy notice
interval, the percentage of orders in jeopardy, and the average completion notice interval for
resale residential POTS, resale business POTS, resale specials, unbundled loops (with and without
number portability), unbundled switching, unbundled local transport, combination of UNEs and
interconnection trunks? And all this later information only satisfies one sub-category of the
Ordering and Provisioning category. I fear that the proposed 12 page list of measurements and
reporting requirements is too costly and far too long to be useful for efficient regulation.

I support the item's request that parties identify the difficulties in obtaining and collecting
the information for a particular measurement, and whether such difficulties outweigh the benefits
of reporting this information. I would go further, however, and encourage parties to comment on
the sheer number of measurements, the extent to which these measures are redundant, and the
level of detail proposed. In addition, I specifically ask that parties include the express costs
associated with providing each portion of this information. I also encourage all parties to focus
their comments on which measures would be most helpful if no more than a few were ultimately
adopted in a Commission white paper. Such a focus might be particularly important in light of the
fact that, under Section 251, these measures and reporting requirements would apply to all local
exchange carriers -- both large and small.

What does the majority indicate about the necessity of these detailed rules? That they are
necessary to replicate market forces: "In a competitive environment market forces will tend to
ensure that wholesalers provide quality service to their buyers. Here, where competition is largely
absent, performance measures and reporting requirements may increase incumbent LECs'
incentive to comply with their statutory obligations." NPRM at 9. But any form of regulation --
no matter how detailed -- is an imperfect surrogate for full-fledged competition.

Even if NPRM Were not Excessively Regulatory, Threat of Litigation Will Stifle
Competition

Given the questions regarding our authority to regulate in this area raised by the Iowa
Utilities v. FCC decision, I believe the Commission will face significant legal and political
opposition as we attempt to define and possibly to establish national OSS standards before the
courts have resolved these jurisdictional questions.

The prospect of legal challenges alone would not be sufficient to dissuade me from a
position that otherwise has merit, but the legal challenges in this particular instance will have a
debilitating effect on the removal of barriers to entry in telecommunications markets. No one
should be so naive as to believe that the national measures proposed in this NPRM will not be the
subject of intense litigation. I cannot predict the outcome of that litigation, but I can and do fear
the shadow that that litigation will cast over efforts of new entrants to enter telecommunications
markets.

There are tens of thousands of local exchanges in the United States. For each of these
local exchanges, each measure proposed today provides the basis for litigation for each
interconnection agreement over any arbitrary period of review. The number of combinations is
literally uncountable.

The measures proposed today provide endless fields for future litigation. Any economist
or statistician in the world can approach a telecommunications carrier and its eager lawyers and
propose to find a deficiency in the OSS measures (interpreted as standards) of a carrier to which it
is interconnected. The likelihood of finding such a deficiency is practically 100 percent. In the
unlikely event that all measures are satisfactory today, one only needs to wait until tomorrow or
next week or the week after to find a deficiency.

I count among my friends many economists, statisticians, and lawyers. Each has
enormous opportunities for employment today without the FCC substantially expanding those
prospects through this NPRM.

Make no mistake: both the threat and the reality of litigation will stifle entry into all
telecommunications markets. Intense and long-lasting litigation will surround this rulemaking.
That litigation will cast a shadow over all past interconnection agreements, over interconnection
agreements made between now and any final court resolution of the Commission's rulemaking,
and over all Section 271 applications in the same time period.(3) Even the threat of such litigation
could cause potential entrants in many markets to pause and wonder whether the increased
uncertainty created by such potential litigation raises the cost of entry too much.

Moreover, agreement-specific litigation will surround each and every interconnection
agreement that fall outside of the specific measures proposed in this NPRM; similar litigation will
cloud those interconnection agreements that follow the proposed measures but which inevitably
have specific measures that are deemed unsatisfactory.

All of these prospects may be good for economists, statisticians, and lawyers, but are they
good for businesses and consumers?

In the end, under this NPRM, it will be courts rather than consumers or even regulators
who will be the final arbiters of who may enter and survive in a telecommunications market, and
who may not. I have complete confidence in the courts, but they should not be burdened with
making day-to-day decisions about matters that the market through competition and contracts can
handle flawlessly and costlessly.

An Informal Paper Would Be Preferable to an NPRM

To the extent that the Commission ultimately adopts a white paper that outlines purely
voluntary standards, some but not all of my concerns would be allayed. While still too regulatory
in approach, at least no State would be compelled to adopt all of the national performance
measures and reporting requirements outlined here. Thus, to the extent that they were voluntary,
states could follow as much or as little of these regulations as they see fit. Nor would the
Commission be bound by these proposed measures or reporting requirements. Presumably, the
risk of litigation with a white paper would be substantially reduced.

But if the goal of this proceeding is merely the adoption of model guidelines that States
may choose to follow as they wish, then why has the Commission proceeded with an NPRM as
opposed to a Notice of Inquiry? Because the Commission may use the experience and record in
this proceeding to "adopt nationally, legally binding rules in this area." NPRM, at 13.

Measures that are mere suggestions, although not binding, might be helpful particularly to
some states that have not initiated their own proceeding. These guidelines may also be helpful to
both the CLECs and the ILECs as common measures to use in the negotiation and arbitration
process. To the extent that we can provide such suggestions and guidance, I am supportive. As
recent events regarding the free airtime issue demonstrate, however, the legal distinction between
an NPRM and an NOI is meaningful both politically and legally. Indeed, the benefit of proceeding
with an NOI, instead of an NPRM, would be that the Commission could not adopt binding
performance measures and reporting requirements as a result of that process. I remain concerned,
however, that in initiating this NPRM we have expressly reserved the possibility of implementing
national regulations; an action that may lead to further protracted legal challenges that will only
overshadow subsequent Commission decisions.

Conclusion

For all of the above reasons, I cannot support this NPRM. I share my colleagues'
commitment to competition and to the Act. I believe the Act has robust language that can
accommodate a wide range of unforeseen circumstances without requiring the Commission to
rush in to pass new rules at every moment. This NPRM is too regulatory. It is not necessary. It
will lead to endless litigation. It will not help consumers. For OSS, I believe that we should let
the Act, the States, and private parties resolve the issues without having the Commission leap in
with a regulatory rulemaking.

2. The Eighth Circuit expressly held that the Commission's authority to prescribe and
enforce regulations to implement section 251 is confined to six areas; section 251(c)(3) is not one
of those enumerated sections and it is not clear that any of the six would provide sufficient
authority for these OSS measurements and reporting requirements.

3. Although the Commission bases its authority to issue OSS performance measures on
section 251 -- not section 271 -- of the Act, the adoption of such measures inevitably will affect
proceedings under section 271 and, in my view, would be inconsistent with the statute's limitation
on the Commission's authority to expand the checklist. See 47 U.S.C. § 271(d)(4).